April’s Aircraft Report: The Fokker 100

The Fokker 100 has seen its fleet shrunk by more than 50 aircraft over the past four years. Although the type is successful for some specific missions, age and engine condition are the main drivers.

Fokker developed the F100 with a view of enlarging its family products to the 100-seat market. Mainly due to its stretched fuselage, maximum seating was increased to 122, compared with 85 passengers for the F28-4000 airframe, on which the F100 is based.

The F100 features a wingspan of 92 feet 2 in. and a length of 116 feet 7 in. Maximum take-off weight is 100,965 lbs (45,810 kg) and maximum range is 1,710 nautical miles (nm) with high gross weight version with the Tay Mk 650 engine.

Fokker offered two engine versions of the type:

• The F100 powered by two 61.6kN (13,850 lbs) Tay Mk 620-15 turbofans. Range is 1,323 nm with 107 passengers. The aircraft has an operating empty weight of 53,738 lbs and a maximum take-off weight of 95,000 lbs.

• The F100 powered by two 67.2kN (15,100 lbs) Tay Mk 650-15 engines with an operating empty weight of 54,103 lbs and a maximum take-off weight of 100,965 lbs. The Mk 650 model represents 93% of the F100 fleet.

The F100 has been in service for more than 24 years now. Developed in 1983, at the same time as the F50 turboprop, it first flew in late 1986. Certification was awarded a year later and the first customer delivery to Swissair occurred in February 1988.

Fokker manufactured 278 aircraft before it ceased production in 1997.

Market

The F100, with the exception of the BAe146/Avro aircraft families have long enjoyed a unique market niche because there was no competition in this market. It has faced with competition from above (A318, 717 and even 737-600) and below (Embraer 190/195 and CRJ-900/1000 models) but like the BAe products, the F100 appears as a cheap alternative.

Today 205 aircraft remain in active service, although 58, or 28% of the total fleet, are currently parked, according to Flightglobal's Ascend Online database.

European operators account for 68 aircraft, or 33% of the active fleet. An estimated 17 aircraft are in storage in Europe.

Africa and the Middle East now account for 35 aircraft, or 22% of the active fleet.

There are 17 aircraft currently in operations in Latin and South America but none in North America. However parked fleets in the Americas total 23 aircraft.

In Asia and the Pacific region the F100 fleet has increased by 12 units to 54 aircraft since 2008. The aircraft continues to have a prime role serving the mining industry in Australia.

Fokker Services' Director of Aircraft Remarketing, Peter van Oostrum says Australia has now become a real stronghold for Fokker aircraft as Network Aviation, which was purchased by Qantas in early 2011, has been adding five Fokker 100s to its existing fleet.

While incumbent operators Alliance Airlines and Skywest Airlines also added Fokker jets last year, the total number of Fokker 70/100s in Australia now stands at 39. Most aircraft are performing fly-in, fly-out services, supporting the booming mining industry in Australia's interior.

Natural resources exploration support is also the core activity of start-up carrier Caspiy in Kazakhstan, according to van Oostrum. The carrier has recently acquired two F100s in addition to the three aircraft purchased last year. Bek Air, also in Kazakhstan, has recently acquired its own F100 after initially leasing one from Caspiy.

While Fokker Services does not directly market Fokker aircraft, it facilitates placements by lessors and sellers. "Good performance, great interior, timely product improvements like LED cabin lighting and iPad EFB, low capital costs and comprehensive support committed until the end of the decade and beyond, are the main reasons why operators have been taking Fokker aircraft and will continue to do so," says Peter van Oostrum.

Age is more an issue as the last aircraft coming out of the production line are now more than 15 years old.

Avitas's director asset valuation Martin O'Hanrahan says the F100 has been considered by some to be a cheap alternative in its size class. "However, issues associated with age and obsolescence cannot be ignored and future prospects are weak at best," he comments.

The F100 market is driven by the engine status. The aircraft suffers from expensive engine hot section inspection (HSI) and overhauls. Investors and operators are hesitant to perform full engines overall as the Tay 650 engine market commands a $2.5-3 million investment. The cost of the life limited parts (LLP) is now over $1 million while the hot section inspection (HSI) is estimated at $1-1.2 million.

IBA Group's senior analyst Alice Gondry agrees. "F100 values are indeed heavily dependent on the condition of the engines and the engine model does have a reputation for being expensive to overhaul. Unsurprisingly, F100 aircraft with above half-life engines will command a premium on the secondary market."

Another trading source says a $3.5 million pricing for a F100 is a good investment. "If the aircraft has 5,000 to 6,000 cycles left before next shop visit, operators can use the aircraft for the next five years, assuming a 1,000 cycles a year. The engines value represents $2 million alone and the operator is left with a $1.5 million airframe to amortise over the required period."

One trading source agrees but warns that the F100 is subject to an airworthiness directives (AD) on landing gears by end of 2013. "That AD would need a €500,000 ($660,000) investment," he says.

The source is offering between $2 million and $2.5 million for some F100s, depending on the aircraft and engines' condition.

Another trader argues that values are more in the $2.5 million to $3 million range. He says some buyers don't necessarily pay the full value of the engines. "A half-life of full-life aircraft may not make a difference to some potential buyers. As long as the aircraft has two or three years left, they will offer the same price."

Over the past few years, there has been a substantial F100 aircraft migration to Australia from South America. Now European aircraft are in excess as operators are re-fleeting with new products.

Currently available are the Brit Air and KLM fleets in Europe. KLM has four F100s in the market at $3.6 million per aircraft asking price, according to a trading source.

Brit Air has mandated Aircraft Finance Trading for the remarketing of three F100s. The source says asking prices are in the $3 million range.

AeroCentury is also in the market for the sale of some ex-Mexicana F100s.

Current market values and lease rates

Today the F100 market is mainly a seller market. Lease rates have stabilised around the $65,000 to $75,000 a month range. In 2008 a good condition Tay 650-powered aircraft was leasing at more than $100,000 a month.

IBA Group says lease rates for a 1991-vintage aircraft are in the $55,000 range. For a 1994-vintage model, IBA sees monthly lease rates around $70,000. Gondry comments: "While values and lease rates are by no means buoyant, they do seem to have stabilised, at least for those with reasonable specification and maintenance condition."

Lease rates are generally between $60,000 and $70,000 a month for Ascend with the upper quote for the youngest aircraft.

Both appraisers agree earlier vintage are more in the $60,000 to $65,000 monthly range.

Collateral Verifications sees lease rates below $50,000 a month. Collateral Verifications' vice president - commercial aviation services Gueric Dechavanne says lease rates will remain soft going forward with little hope for recovery. "As the availability of newer aircraft continue to increase, we feel that this aircraft will be faded out over time as there doesn't seem to be many viable alternatives for this aircraft type which will make it unattractive to too many operators," he comments.

Ascend says a 1987-vintage aircraft has a $3 million half-life market value. Avitas opines the aircraft has a $2 million current market value while Collateral Verifications is the most pessimistic with a $1.56 million current market value.

A 1991-vintage aircraft has a $2.25 million current market value for Collateral Verifications. IBA Group opines that a 21-year old aircraft with a 101,000 lbs maximum take off weight has a $2.6 million current market value. Avitas says the aircraft has a $2.4 million current market value while Ascend's half-life market value is $3.1 million.

Ascend and IBA Group valuations are above the $3 million mark for a 1994-vintage aircraft, with $3.4 million and $3.1 million, respectively. Avitas says a 1994-vintage aircraft has a $2.9 million current market value while Collateral Verifications estimates the aircraft at $2.75 million.

A 1996-vintage aircraft has a $3.6 million half-life market value for Ascend, a $3.2 million current market value for Avitas.